Dialing down reciprocal duties on phones, computers, later increases a risk

The US customs authorities have issued a further clarification to the Trump administration’s reductions in so-called “reciprocal tariffs,” focused on the electronics sector. Electronic components were already on the list for exclusion due to potential plans for a Section 232, national security investigation of the products.  

The new list includes smartphones, network connected devices, all types of computers and computer components including monitor panels, which were previously not excluded. The exposure of those products to imports from mainland China at a 145% tariff rate had been widely blamed for the sharp drop in share prices of several electronics manufacturers. Mainland China accounted for 81.1% of US imports of smartphones, 66.1% of laptop computers, 14.2% of components and 13.7% of other network devices in 2024, according to our data. 

Tariffs remain a risk in peak new product season 

Shifting supply chains fully into the US for complex electronic devices appeared largely impractical within a three-year timeframe due to the need to reshore component production as well as assembly to be fully “tariff proof.” 

The device makers are also not completely out of the woods. Imports from mainland China remain subject to International Emergency Economic Powers Act (Fentanyl) duties at a rate of 20%, though shipments from other manufacturing centers including India and Vietnam will shift to a zero additional duty rate. The inclusion of the devices in the new exemptions means they will also be included in the forthcoming review of the semiconductor and electronics components sector, according to Commerce Secretary Howard Lutnick. That could lead to significantly higher tariffs in the future as part of what could be a Section 232, national security review of the sector.  

Mainland China has not yet indicated that it will lower tariffs on US goods in parallel with the recently announced US exemptions, leaving duties on imports of US electronics as an ongoing challenge for manufacturers further upstream in their supply chains. The government has referred to the exemptions only as a “small step” to correct "wrong actions." It has already put a cap on further tariff increases and is likely to wait for clarity on new sector-specific US tariffs before committing to de-escalation.  

Otherwise, mainland China is unlikely to initiate dialogue or offer major concessions to the Trump administration in the one- to two-month outlook, absent more comprehensive tariff rollbacks initiated by the Trump administration. Longer term, both sides may seek de-escalation as the broader economic impact of trade disruptions become more apparent in the third quarter of 2025. 

As a result of the US reciprocal duties, firms had been pursuing alternative tactics for meeting demand in the US, though price rises were likely going to have to be pursued during the peak new product launch season in the fourth quarter of 2025. The reprieve from even higher duties may lead the firms to bring forward imports of established machines to mitigate further tariff increases later in the year. Bringing forward new products may be more challenging given the necessities of development, release and marketing needs. 

Exports of smartphones from mainland China to the US typically peak in September through November each year with imports of laptop computers peaking slightly earlier due to back-to-school sales. Both may peak earlier this year because of tariff management strategies.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.